In his paper, Schneider tries to account for the fact that the payoff may vary, depending on the the school the student attends. The "Harvard-educated hedge fund manager" may be making, or used to make, hundreds of millions a year, he notes, while the "graduate from Bob's college" may get promoted from assistant manager to manager of the retail store at the mall as a result of his degree. To get a better handle on the variation, the former statistics czar uses longterm federal survey data to compute actual earnings for graduates of colleges at different levels of competitiveness.

He also accounts for tuition expenses and the cost of the earnings that are foregone while a student is studying in college. He concludes that, while college does indeed provide a substantial payoff for most students at most colleges, it's nowhere near the $1 million figure that gets quoted so much. That number, in fact, may be three times too high, according to Schneider.

Keep that in mind the next time you get a notice of another tuition increase from your child's college.